In their early 1970s heyday, the Stooges were one of punk rock's archetypal bands, creating music that was to inspire and influence several generations of younger groups in America and Britain. Most attention was focused on the charismatic lead singer, Iggy Pop, but the band's sound owed just as much to the aggressive and elemental guitar playing of Ron Asheton, who has died aged 60. Paying tribute to Asheton, Steve Jones of the Sex Pistols said that the early Stooges albums had provided him with a blueprint for playing guitar.

Asheton was born in Washington DC but moved to the college town of Ann Arbor, Michigan, as a child. He and his younger brother, Scott, attended Pioneer high school there and soon became involved in the town's thriving rock music scene. At 17, he became the bass player with local groups the Prime Movers and the Chosen Few, and met James Osterberg, who had recently adopted the stage name Iggy Pop.

Pop soon left in search of a career as a blues drummer in Chicago, but according to Asheton, he abandoned this goal in 1967 and called him to suggest they form a band along with Scott, who by then was a promising drummer. With the addition of bass player Dave Alexander, the trio formed the Psychedelic Stooges, playing their first gig at a Halloween party.

Shortening their name to the Stooges, they were championed by Detroit rock magazine Creem and were given a recording contract with an advance of $25,000 by Elektra Records, which had recently signed another local band, the MC5. John Cale of the Velvet Underground produced the eponymous debut album, which accurately reflected the group's live sound on songs such as No Fun and I Wanna Be Your Dog, a track that one critic said had "given birth to 50,000 bands".

The album was critically acclaimed but sold poorly, as did the next album, Fun House. The Stooges were inactive for a large part of 1971 and 1972 as Pop recovered from drug addiction. They re-formed, partly at the insistence of David Bowie, whose manager Tony de Fries undertook to find them a new record contract. With the addition of guitarist James Williamson, the Stooges played their first show outside America at the King's Cross cinema (now the Scala) in London and recorded a new album. Asheton reverted to playing bass, with Williamson taking the lead guitar role on Raw Power, which was produced by Bowie and issued in 1973.

Like its predecessors, Raw Power was a commercial failure, and in 1974 the Stooges disbanded. While Pop teamed up with Bowie and followed a solo career, Asheton formed the group Destroy All Monsters with former MC5 member Michael Davis. His later groups included the New Order and Dark Carnival.

In the 1980s and 90s, Asheton had little financial reward from his music, claiming in an interview that he often played for only $15 a night. Rolling Stone magazine rated him the 29th most important guitarist in popular music - describing him as "the Detroit punk who made the Stooges' music reek like a puddle of week-old biker sweat" - and he enjoyed the growing recognition of his influential place in the punk pantheon, especially in Europe. He told an interviewer in 2007: "It's great to be able to play in front of an audience that knows the lyrics to your songs."

His career began to revive in 1998 when he contributed music to Velvet Goldmine, a film celebrating the glam rock era. Two years later he, his brother and the bass player Mike Watt - replacing Alexander, who died in 1975 - recreated the original Stooges sound in a series of concerts.

Pop attended one show and suggested a Stooges reunion. The first shows were staged in 2003, after which the Stooges recorded a new album, The Weirdness - which, like the earlier albums, did not sell well - and toured several times, memorably performing at the 2007 Glastonbury festival.

Asheton's body was found at his Ann Arbor home. The cause of death was unknown, but unconfirmed reports said he had been dead for several days.

• This article was amended on Friday 9 January 2009. The track Down on the Street does not feature on the Stooges' first album, as we said in the article above. It is the first track on the group's second album, Fun House. This has been corrected.